The EIA forecast U.S. crude production at an average 9.9 million barrels per day in 2018, up 1.8% from the previous forecast. May West Texas Intermediate crude was trading at $53 a barrel, down 8 cents, or 0.2%, while June Brent fell 23 cents, or 0.4%, to $55.75. The U.S. Energy Information Administration raised its forecast on crude-oil production but lowered its outlook on prices, according to the agency’s monthly Short-term Energy Outlook report released Tuesday. It sees 2017 output at 9.22 million barrels a day, up a modest 0.1% from the previous forecast. The EIA also lowered its crude-price forecast, with West Texas Intermediate crude CLK7, +0.26% seen at an average $52.24 a barrel, and Brent crude LCOM7, +0.02% at $54.23 in 2017, down 2.3% and 0.7% from last month’s forecast, respectively.

“Having been through their own recession, US exploration and production companies – and those focused on shale – are now able to operate in a lower oil price environment,” he says. Oil prices are unlikely to rebound significantly from current levels, with a glut of supply and increasingly advanced methods of extraction set to keep the commodity’s price lower for longer, according to Stephen Jones, chief investment officer at Kames Capital. Oil has fallen sharply in the last month, with the price of Brent crude retreating more than 10% from US$56 at the start of March to below US$50. While some observers argue these are short-term factors that will unwind, Jones says the environment for oil had changed drastically on both the supply and demand side. “We are now in a world which is becoming much more conscious about how it uses oil energy, and wants to replace it with other things.” The EIA forecast U.S. crude production at an average 9.9 million barrels per day in 2018 , up 1.8% from the previous forecast.